Life Care Centers of America (“LCCA”), and its owner Forrest Preston, have agreed to pay $145 million to settle a government lawsuit alleging that LCCA violated the False Claims Act by knowingly causing their nursing homes to submit false claims for rehabilitation therapy services that were not reasonable or necessary. The Tennessee based company, owns and operates more than 200 nursing homes across the United States. Forbes estimates that Forrest Preston, who is sole owner of the company, has a net worth of around $1.4 billion.

The lawsuit alleged that LCCA committed fraud by falsely billing Medicare and TRICARE for medical services that were provided to patients who were ineligible to receive them. Medicare reimburses nursing homes at a daily rate for the health care services that they provide to Medicare patients. This daily rate is based on the level of care that is provided to a patient, as well as the amount of time that a patient spends receiving that care. Further, the Complaint contended that LCCA pressured their employees to provide the maximum level of care to their Medicare and TRICARE beneficiaries, despite the fact that many of these patients did not need these services, in an effort to increase the daily rate they billed to the government. The Department of Justice argued that this excessive level of medical attention, and increased length of stay, was harmful to these patients, and that LCCA’s financial interests were prioritized over the quality of care that was provided to their patients. The settlement ends eight years of litigation in two consolidated False Claims Act lawsuits filed separately by a former nurse and a therapist employed at LCCA.

The False Claims Act allows private citizens to sue those that commit fraud against government programs. Moreover, the False Claims Act contains qui tam, or whistleblower, provisions. Qui tam is a unique mechanism in the law that allows citizens with evidence of fraud against government contracts and programs to sue, on behalf of the government, in order to recover the stolen funds. In compensation for the risk and effort of filing a qui tam case, the whistleblower or “relator” may be awarded a portion of the funds recovered, typically between 15 and 25 percent.

The Australian Therapeutic Goods Administration (TGA), similar to the United States Food and Drug Administration (FDA), issued a Hazard Alert on September 27, 2016 for Stryker LFIT Anatomic CoCr V40 femoral heads. The LFIT V40 is a femoral head that orthopedic surgeons utilized in hip replacement surgeries. The Stryker LFIT V40 can be used interchangeably with Stryker’s entire product line of modular total hip replacement devices and is designed to offer a large range of offsets based on a patients’ needs. According to the Australian TGA, some LFIT Anatomic CoCr V40 femoral heads have a “higher than expected incidence of taper lock failures.” The taper lock connects the femoral head and femoral neck of the hip prosthesis. If the taper lock fails, the patient can suffer severe complications including catastrophic disassociation and metallosis, resulting in the need for emergent revision surgery. These conditions can lead to the destruction of tissue in the area of the implant, causing all sorts of complications. Stryker has recently notified orthopedic surgeons who have implanted the LFIT V40 of the increased incidence of taper lock failure and ensuing complications.

The Defective Medical Product attorneys at Suthers Law Firm are investigating the Stryker LFIT CoCr V40 femoral head cases on behalf of patients who were implanted with these devices and have suffered complications. These attorneys previously prosecuted cases successfully against Stryker on behalf of many patients who were surgically implanted with Stryker Rejuvenate hip replacement products, which products were recalled by the FDA because of similar complications.

Recently, we reported on the new rule issued by the Centers for Medicare and Medicaid Services (CMS) that bars nursing homes from requiring residents to sign arbitration agreements as a condition of their admission to the nursing home. These forced arbitration agreements prevented nursing home residents and their family members from filing a lawsuit against the nursing home when the resident was neglected and injured or killed.

Pre-dispute, forced arbitration agreements prevent the victims from enforcing their right to a jury trial and instead, require that their claims be decided by a single arbitrator. By banning pre-dispute arbitration agreements, CMS effectively reinforced the right to a jury trial granted to all citizens by the Seventh Amendment to the United States Constitution.

Now, the nursing home industry has filed a lawsuit against CMS in a desperate attempt to overturn the new rule. The lawsuit challenges CMS’ rule prohibiting nursing homes’ use of pre-dispute arbitration agreements, which are designed to avoid accountability when nursing homes abuse and neglect residents. As attorneys who have represented victims of abuse and neglect in nursing homes and their family members since the 1990s, we can tell you that these cases are far too common. Instead of working to provide better care to nursing home residents, the nursing home industry chose to file a lawsuit in a last-ditch attempt to be able to continue to use pre-dispute arbitration agreements. It is ironic that the nursing home industry has filed a lawsuit that seeks to deprive residents and their family members of their right to file a lawsuit when a resident is injured or killed as a result of abuse or neglect in a nursing home. That is the textbook definition of hypocrisy.

Lawsuits brought by so-called “whistleblowers” are also referred to as qui tam lawsuits. The phrase “qui tam” is an abbreviation of a Latin phrase meaning “he who sues in this matter for the king as well as for himself.” In a qui tam lawsuit, an individual, known as the relator, brings a case on the Government’s behalf, alleging that the Government has been defrauded out of money. The Government, not the relator, is considered the real party-in-interest. If the Government succeeds and recovers money from the wrongdoer, the relator receives a percentage of the Government’s recovery. The False Claims Act, codified at 18 U.S.C. § 286, 18 U.S.C. § 287, and 31 U.S.C. § 3279, allows private parties to file qui tam or whistleblower lawsuits. Most states have similar whistleblower laws. Whistleblower lawsuits are an effective and powerful means for whistleblowers to assist the Government in stopping various kinds of fraud, such as Medicare and Medicaid fraud, fraud by defense contractors and other contractors who sell products to the Government, and other types of fraud that have a negative financial impact on the Government. If the lawsuit succeeds, the private party, or relator, who brought the suit initially may receive anywhere from 15% to 30% of the Government’s recovery. Because these cases often involve millions and sometimes, billions of dollars, whistleblower lawsuits can be very lucrative.

As an example, take the case in which Tenet Healthcare, which owns hospitals across the U.S., including Tenet subsidiaries that operated hospitals in Georgia and South Carolina, agreed recently to pay more than $516 million to the Government in settlement of a whistleblower lawsuit. Tenet Healthcare was accused of conspiring to pay kickbacks and bribes to several clinics that were operating in Georgia that targeted Hispanic, expectant mothers and directed them to Tenet hospitals for their deliveries. Tenet made claims to Medicaid for the services that were provided to these undocumented foreigners. It was also alleged that Tenet’s hospitals used contracts that were shams to try to cover up the payments of kickbacks to the clinics for the referrals of thousands of undocumented, pregnant patients. Medicare and Medicaid laws, as well as anti-kickback laws, bar hospitals from paying clinics, doctors or others for steering patients to them for treatment. The whistleblower who brought the lawsuit using private attorneys was the former Chief Financial Officer at a Tenet hospital in Georgia. He will receive approximately $84 million from the recovered funds for his role in bringing the case.

Other examples of significant recoveries by whistleblowers include a former sales executive for pharmaceutical giant GlaxoSmithKline who filed a qui tam lawsuit alleging off-label or unapproved marketing of several of the manufacturer’s drugs. That case was part of several whistleblower lawsuits against the manufacturer which resulted in a then record settlement of $3 billion in 2012. In another similar case involving a drug manufacturer, a former sales representative of Pfizer, Inc., brought a qui tam lawsuit, alleging the manufacturer engaged in off-label marketing of its painkiller, Bextra. The claims involved Pfizer’s marketing of the drug for unsafe and potentially dangerous uses. In that case, Pfizer paid $1.8 billion as part of a settlement with the Government for Medicare fraud. Whistleblower lawsuits have been filed against large nursing home chains, alleging that the nursing homes billed Medicare and Medicaid for services that were not provided to residents. These cases resulted in large recoveries by the Government and large rewards to the relators. In a case involving a defense contractor that was allegedly defrauding the Pentagon, the Government recovered $88 million as a result of the whistleblower lawsuit. The whistleblower in that case was a former manager for the defense contractor. His reward for being the whistleblower was 21.5% of the Government’s recovery, which totaled almost $19 million.

As we have written on this blog numerous time over the years, many nursing homes and other long-term care facilities use forced arbitration contracts to prevent their residents from bringing a legal action against the facilities in a court of law, and are instead forced into expensive, secretive arbitration proceedings. As of this week, a federal government rule looks to put an end to the practice of pre-dispute forced arbitration.

A new Centers for Medicare and Medicaid Services “CMS” rule will bar nursing homes from compelling residents to settle disputes in arbitration as a condition of admission. Residents and facilities will still be able to use arbitration on a voluntary basis after a conflict occurs, however, CMS says. In these cases, CMS requires that these arbitration agreements be clearly explained to residents, including the understanding that these agreements are voluntary, and that these agreements should not discourage or prevent residents and their loved ones from alerting authorities to concerns about quality of care. Though again, all of this would occur after an incident or injury in the nursing home has taken place.

“Today’s rules are a major step forward to improve the care and safety of the nearly 1.5 million residents in the more than 15,000 long-term care facilities that participate in the Medicare and Medicaid programs,” Andy Slavitt, said the acting administrator for CMS. Along with the pre-dispute arbitration ban, the final rule also mandates nursing home operators provide “nourishing, palatable” dietary options that meet residents’ nutritional needs and preferences, create an infection prevention and control program and develop a comprehensive, person-centered care plan for each resident within 48 hours of admission. A nurse aide and a member of the dietary staff must contribute to that care plan, the rule reads. The rule also includes new and updated regulations on elder abuse, staff competency and discharge planning.

The Centers for Medicare and Medicaid Services (CMS) released its latest quality ratings of nursing homes in the United States. One out of every four Georgia nursing homes received the lowest rating, one star. A one star rating means that the nursing home is “much below average.” Four Savannah-area nursing homes were among those facilities in Georgia receiving one star ratings. Those nursing homes were Signature Healthcare of Savannah, Thunderbolt Transitional Care and Rehabilitation, Abercorn Rehabilitation in Savannah, and Oceanside Health and Rehab. in Tybee Island. A Bryan County nursing home, Bryan County Health & Rehab. Center in Richmond Hill, also received a one star rating.

CMS rates nursing homes on health inspections, staffing, and quality measures. CMS looks at the star ratings for each of the three, above-referenced components and then derives an overall rating. The ratings range from one star, which means “much below average,” to five stars, which means “much above average.” With 27.6% of its nursing homes receiving a one star rating, the State of Georgia ranks second worst in the Southeast. CMS created the rating system several years ago to provide consumers with more information about the performance of services and quality of care delivered at nursing homes throughout the United States. Dr. Patrick Conway, the Deputy Administrator and Chief Medical Office of CMS, stated that the star ratings provide a “more accurate reflection of the services that nursing homes provide.”

Savannah attorney John Suthers was among the first lawyers in the United States to successfully sue and hold a nursing home accountable for abusing and neglecting a resident. Suthers said, “I applaud the transparency of the star rating system. When folks are faced with the important decision of placing a loved one in a nursing home, this rating system gives them an easier way to determine which nursing home is the best fit.” However, Suthers cautions that the rating system is just one way of looking for a nursing home. Families should still go to the nursing home to see how it appears, ask the right questions, and determine whether it will meet the needs of their loved one. For tips on how to select a nursing home, questions to ask and how to recognize signs of abuse or neglect, go to the Nursing Home Resource Center page at www.sutherslaw.com. For a searchable list of nursing homes and their ratings, go to the Nursing Home Compare page on the CMS website.

After an alarming report by the website ProPublica, the Centers for Medicare and Medicaid Services has announced plans to crack down on nursing home employees who take demeaning photographs and videos of residents and post them on social media websites. The report documented 44 known incidents across the country since 2012 in which nursing home workers posted photos or videos of nursing home residents on social media websites such as Facebook, Instagram and Snapchat. Among the incidents documented by the report was a certified nurse assistant sharing pictures of a resident lying naked in bed covered in feces. Additionally, earlier this year, a 21-year-old nursing home CNA in Wisconsin recorded a video of a partially nude, 93-year-old Alzheimer’s patient playing tug-of-war with her clothes. At the time, the CNA “thought it was funny” according to her post on social media. She is now facing criminal charges for the post.

As a result of the ProPublica report, the Centers for Medicare and Medicaid Services (CMS) sent out a memo to state regulators laying out guidelines that forbid employees from taking demeaning or humiliating photos and videos of residents. The memo sets uniform standards for how such abuse should be written up by inspectors and the severity of sanctions that should be levied. In the past, there was great variability.

“Nursing homes must establish an environment that is as homelike as possible and includes a culture and environment that treats each resident with respect and dignity,” said the memo signed by David Wright, director of the CMS survey and certification group. “Treating a nursing home resident in any manner that does not uphold a resident’s sense of self-worth and individuality dehumanizes the resident and creates an environment that perpetuates a disrespectful and/or potentially abusive attitude towards the resident(s).”

Since reports of deaths and injuries linked to a defect in Takata airbags, nearly 70 million Takata airbags have been recalled in the U.S. That means that almost one out of every five cars has a potentially defective airbag. More and more automobiles equipped with Takata airbags have been the subject of recalls on an ongoing basis.

Takata’s use of a volatile chemical, ammonium nitrate, has been cited as one of the major reasons the Takata airbags are dangerous. Because ammonium nitrate is a volatile substance, it can become unstable when exposed to sudden changes in temperature or humidity. Typically, there is a metal housing surrounding the airbag. When the ammonium nitrate explodes with enough force, the metal housing cannot contain it, resulting in the airbag exploding and metal shrapnel being propelled through the air.

To date, the Takata airbags in approximately 9 million automobiles have been repaired. However, it was reported recently that Takata is using several of the same parts and materials which were used in the faulty airbags. This has caused significant concerns among many experts. Takata claims that it has added a substance to the ammonium nitrate that is intended to keep the ammonium nitrate dry, even in conditions of high temperatures and humidity. However, some industry experts believe that Takata’s solution does not adequately address the problem of ammonium nitrate becoming unstable during temperature changes. Because Takata is responsible for the repairs, and due to the recent discovery that Takata continues to use some of the same methods and components that were used in the manufacture of the defective airbags, consumers should be concerned.

As part of an ongoing campaign by trial lawyers across America to end the abusive use of forced arbitration, the American Association for Justice (AAJ) has released a new report outlining how arbitration clauses stack the deck against American citizens. The report entitled “FORCED ARBITRATION: HOW CORPORATIONS USE THE FINE PRINT TO BULLY AMERICANS” provides an in depth analysis of how corporations use arbitration clauses to deprive consumers, workers, students, and patients of their 7th Amendment right to trial by jury when they have been injured by a corporate wrongdoer.

Buried in credit card agreements, employment contracts, nursing home admission papers, or in click through agreements that come with online purchases, are arbitration clauses designed to prevent you from utilizing your constitutional right to a trial by jury. Forced arbitration eliminates the right to hold corporations accountable in court when they injure someone or break the law. Instead, these claims are funneled into a system designed by the same wrongdoers against whom the claim is being made.

Unlike lawsuits, where the parties are given the opportunity to conduct meaningful discovery, take depositions, and have disputes over issues decided by judges, forced arbitration is different. There is no right to go to court, no right to a trial by jury, no right or a very limited right to conduct discovery, and no right to a judicial review. In forced arbitration, usually one individual, the arbitrator, acts as the judge and jury without the traditional checks and balances that are afforded to the parties in a lawsuit.

The Suthers Law Firm continues to investigate alleged claims of serious and sometimes fatal side effects suffered by patients who were prescribed “Low T” drugs for testosterone therapy. The drugs, including AndroGel, AndroDerm, Axiron, Foresta, Testim and others, have been heavily prescribed over the past several years as a safe way to treat men with low testosterone. However, numerous recent studies suggest that men taking AndroGel have a far greater risk of suffering a heart attack, stroke, congestive heart failure, or other adverse cardiovascular event.

On May 29, 2014, an order was issued that established a federal testosterone multidistrict litigation (MDL) before U.S. District Judge Matthew F. Kennelly in the Northern District of Illinois. The purpose of creating an MDL is to facilitate faster progression of a large number of lawsuits that have certain allegations of fact in common. An MDL is designed to eliminate inconsistent court rulings among these cases, as well as expensive and unnecessary duplication of discovery. All of the lawsuits that were transferred to the Northern District of Illinois allege that drugs such as AndroGel, AndroDerm, Axiron, Foresta, Testim and others caused serious, and sometimes fatal, cardiovascular problems in men. There are currently more than 5000 cases pending in the MDL.

In the near future, bellwether trials will begin in the Testosterone Replacement MDL. Bellwether trials are cases that the court and the parties select to test their arguments. These bellwether cases, are typically representative of issues that will arise in every injured person’s case. The goal of a bellwether process is to give all interested parties a good indication of what is likely to happen in future trials and to advance the litigation in a timely manner. In the Testosterone Replacement MDL, a series of six cases are expected to go to trial beginning in June 2017. While the outcomes of these early trial dates are not binding on other cases, they may influence eventual Androgel settlements or other negotiations to resolve cases and avoid the need for hundreds of individual trials to be scheduled in courts throughout the country.